On Monday, Oppenheimer adjusted its outlook on MindMed (NASDAQ:MNMD) shares, a biotech company specializing in psychedelic-inspired therapies. The firm lowered its price target to $20 from the previous $29, while maintaining an Outperform rating.
MindMed recently disclosed its financial results for the first quarter of 2024, with earnings per share (EPS) falling short of expectations at a loss of $1.14. This was notably below Oppenheimer's estimate of a $0.46 loss per share and the consensus estimate of a $0.53 loss per share. The shortfall was largely attributed to costs associated with financing warrants.
Despite the earnings miss, Oppenheimer expressed optimism regarding MindMed's ongoing clinical programs. The company reported favorable outcomes from its Phase 2b trial, showing sustained improvements in the Hamilton Anxiety Rating Scale (HAM-A) at both the 4-week and 12-week marks.
These results support the continuation of MindMed's planned Phase 3 program, which is expected to begin in the second half of 2024 after an End of Phase 2 meeting scheduled for the second quarter of the year.
The Phase 2b success also paves the way for the exploration of additional uses for MM-120, MindMed's investigational therapeutic. The analyst noted the potential for MM-120 to treat depression, backed by secondary endpoint data from the Phase 2b trial that showed a significant reduction in the Montgomery-Åsberg Depression Rating Scale (MADRS) scores.
Despite the reduction in the price target, the firm's reiteration of the Outperform rating indicates a belief in MindMed's long-term potential. The adjustment reflects current market conditions and the impact of recent dilution, as the company continues to navigate its path towards initiating its Phase 3 program.
InvestingPro Insights
As MindMed navigates its clinical and financial milestones, real-time data from InvestingPro provides a snapshot of the company's current market position. With a market capitalization of $665.54 million, MindMed's financial health is underscored by holding more cash than debt, which is a positive sign for investors. However, the company's P/E ratio stands at -3.06, reflecting the market's anticipation of future earnings and the challenges of reaching profitability, as analysts do not expect MindMed to be profitable this year. The adjusted P/E ratio for the last twelve months as of Q1 2024 further highlights this at -5.31.
InvestingPro Tips reveal that while MindMed has strong liquidity, with liquid assets surpassing short-term obligations, it suffers from weak gross profit margins. Additionally, MindMed has not been profitable over the last twelve months. Despite this, the company has experienced a high return over the last year, with a 202.61% price total return, and a notable 281.07% increase over the last six months, indicating significant investor interest and market momentum.
For readers looking to delve deeper into MindMed's financials and future prospects, additional InvestingPro Tips can provide further insights—there are 9 more tips available for MindMed, which can be found by visiting InvestingPro's MindMed page. To access these insights and more, use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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